Smart Talk: 17,200-16,800 good buy opportunity in Nifty, says Kapil Shah, Emkay Global

With the Nifty trading in the range of 17,770 to 18,200 for the last four weeks, any downward reaction around 17,200 to 16,800 can be considered a good buy opportunity, says Kapil Shah, Technical Analyst at Emkay Global Financial Services. “Moving above 17,400 level, buyers will regain their strength,” he says. Edited excerpts from an interview:

Nifty showed support at 17,600 level during the week but faced resistance above the 18,100 zone. Do you expect the coming week to be a sideways market?
From the past 4 weeks, the index has been trading in the range of 17770 to 18200. The underlying tone of the market is sideways to negative as the index had formed a bearish engulfing pattern on the monthly chart which is a bearish reversal sign. On the lower side, the index has strong support at 17800 level as it is neckline of Inverted head and shoulder pattern and 100 EMA support on daily chart.

Closing below 17770 will be a bearish continuation sign and 18200 is immediate hurdle level.

We are just 2 weeks away from the Budget. In which sectors or stocks are you seeing momentum in the run-up to the event?
In the recent context, we are seeing positive movement in energy and metal stocks. So commodity stocks are in the limelight. Auto and banking stocks are also in movement. So, these are the sectors to look in for further traction on the higher side.

What is the best trading strategy ahead of the Budget?
Overall structure of the market is very good. Any downward reaction around 17200 to 16800 can be considered a good buy opportunity. Moving above 17400 level, buyers will regain their strength.

Nifty IT was the top sectoral performer during the week. What does the chart look like for the week ahead?
In the previous week, the IT index was up by 3.5% but the broader structure of the index is under consolidation. Moving above 29050 can give a short term upside move but from a positional perspective it can consolidate for a couple of quarters.

Which are the top 3-4 stocks that would be on your radar for the week ahead?
Balkrishna Industries and Aditya Birla Capital on the positive side and Voltas and Tata Consumer on the short side.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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